Singapore (19 Oct 2020) – The performance of the Nasdaq Composite Index is showing bulls still dominate the market. The Index has been on a four-week winning streak, reversing losses experienced during early September sell-off.
Year-to-date performance is edging over 30%, while over a period of one year it has turned in an impressive 43.66% gain.
As of last Friday, bulls have 64% control of the overall market, which in turn moved over 4,494 stocks well above the SMA-50. Wall Street seems to be ignoring President Donald Trump’s warning that the stock market rally will hit a top if the Democrats presidential nominee, Joe Biden, wins the election.
Chart 1
Looking closely at the chart provided by CNN above, a potential formation of cup & handle chart pattern could signal further bullish bias in the market. The September correction was a normal pause following over a 5-month bullish rally from the March bottom. Earlier this month JP Morgan analyst gave a bullish outlook for the market in 2021 – an upside as much as 20% from the current level – if President Trump is no longer in the presidential seat.
Wall Street Q3 earnings season has just begun and volatility is to be expected. Uncertainties surrounding the US Presidential Election are further stoking the volatility.
One should be very cautious around an earnings season. A good rule of thumb for this quarter and ahead of the election, is to stay in cash or at least be very defensive in your portfolio management. New buying should be done after the presidential election.
Chart 2
Chart provided by Finviz.com
However, one particular stock of interest is Advanced Micro Devices (AMD) in the semiconductors technology sector. AMD will be releasing its quarter earnings on 27 October. An analyst forecasts AMD’s Q3 earnings per share to grow over 94% year on year.
AMD weekly chart above indicates that the stock is currently making a base for a potential cup & handle chart pattern and may signal another bullish outlook. If AMD breaks out of the topside, the price could potentially hit the USD 100 level, from its current USD 83. However, if it breaks down the September low it could revisit the USD 60-USD 50 levels.-/- www.halaluniverse.net
Disclaimer: Mr Mukhriz Mangsor is a Certified Financial Technician and an independent trader who contributes to www.halaluniverse.net on a regular basis. He focuses his attention on the technology stocks listed on Nasdaq.The content of this article should not be considered as a recommendation to buy or sell a security. All information is intended for educational purposes only and not as an investment advice. You should seek a professional investment advice from licensed investment advisors.
